Major Group: Business & Industry
BUSINESS AND INDUSTRY MAJOR GROUP
INDUSTRIAL DEVELOPMENT TALKING POINTS
for the IPM (26 Feb ? 2 Mar 2007)
27 FEBRUARY 2007
While industrial development is just one distinct aspect of commercial activity, many sectors
beyond manufacturing (such as agriculture, retail, services, energy, natural resources and
others) depend on it, making it central to commercial activity and sustainable development. As
such, industrial development is a critical contributor in the prosperity and progress of societies in
developing and developed countries.
Through industrial development, business is:
? Creating jobs and contributing to capacity-building
? Building and maintaining infrastructure (important for energy and water, among others)
? Growing new opportunities for economic growth at local and regional levels
? Promulgating accountable and transparent environmental and other management
systems, cleaner production and eco-efficiency
? Generating resources needed to finance social needs, for example, tax revenues to
public authorities
? Providing goods and services at competitive prices
? Sharing good practices and contributing to capacity building
? Engendering technological innovation and cooperation.
The capacity and willingness of the private sector to advance sustainable development is
immense. Yet ultimately, success will depend on the will of local and national
governments to implement the appropriate policy and governance frameworks.
Partnerships and voluntary initiatives should also be pursued by business, governments
and other stakeholder groups in an effort to create maximum value and complement
regulation. Building a sustainable future will require tapping and enabling the
capabilities and resources of all to invent, manage, empower and cooperate.
The challenge ahead in the area of industrial development is what can be done to support and
promote the growth of sustainable businesses, particularly in developing countries.
Industrial development makes its greatest contribution to sustainable development in the
context of sound enforced regulation and good governance that relies to the extent possible on
sound science, risk management, the market and voluntary approaches that supplement legal
requirements. Creating an enabling environment within which enterprises of all sizes and
sectors can develop, create jobs, and pursue technological innovation and cooperation, coupled
with sound governance and policies to reduce barriers to international trade and FDI, traces a
significant route out of poverty.
PROMOTING AN ENABLING ENVIRONMENT AT THE INTERNATIONAL AND NATIONAL
LEVELS FOR INDUSTRIAL DEVELOPMENT
A successful and sustainable industrial base strengthens society. Many parts of the business
community are engaged in the process of industrial development, and many more depend upon
it. As such, industrial development is clearly an essential component of the activities of society
as a whole. Industrial development?s substantial contribution to economic growth helps create a
large part of the resources needed to finance public sector environmental protection and social
- 6 -
development programmes, for example, through providing tax revenues to public authorities,
and setting and enforcing scientific and risk-based regulations. Industrial development also
contributes to the social and economic aspects of sustainable development through direct job
creation and indirect employment effects via supply chain interactions with other sectors of the
economy.
Three key areas of required domestic legal and regulatory frameworks to grow sustainable
businesses are set out in a recent report of the Secretary-General on Strengthening the Role of
the Private Sector and Entrepreneurship in Financing for Development, as having a strong
impact on the business environment:
? Opening and closing a business?bureaucratic requirements to start up a business are
excessive and time-consuming in many countries and laws and regulations often restrict the
ability of enterprises to restructure or shut down.
? Property rights?in many developing countries a large part of land property is not formally
registered, limiting access to credit and improved land values, especially for small
enterprises and the informal sector; reducing the size of the informal sector should be a
prime objective of public policy.
? Effective enforcement of contracts and protection of creditor rights, which needs a well
functioning court system backed by effective enforcement.
Conducive enabling frameworks are critical both for local business communities and for foreign
investment. Further, cooperation between business and governments, with understanding of
their respective roles and responsibilities, is crucial. Industrial development will be slowed by
the lack or poor condition of infrastructure in areas such as water, energy, telecommunications
and road systems. Infrastructure development is a priority concrete area where public and
private sectors can work together through public private sector partnerships. For such
partnerships (PPPs) to succeed:
�� The legal framework needs to enable the entrance and operation of private entities in what
are often state-controlled industries;
�� The coordination of preparatory measures for efficient PPP start-up and implementation is
necessary;
�� The allocation of risks through contractual agreements needs to be addressed. While
considering measures to facilitate PPPs, it is important to note that project profitability is a
vital prerequisite for private sector involvement, especially if the project requires long-term
engagement.
STRENGTHENING CAPACITY-BUILDING SUPPORT TO DEVELOPING COUNTRIES TO
DIVERSIFY EXPORTS, WITH PARTICULAR ATTENTION TO SMEs
? Policies that hamper market access for products that are deemed not to satisfy arbitrary
criteria for their production and components have a particularly negative impact on
developing countries. These policies in the name of SCP penalize developing countries for
their stage of development and different sustainability priorities.
? The business community?s role in capacity building, technological cooperation and foreign
direct investment (FDI) is critical in helping developing countries progress social and
economic development, and improve environmental practices.
? Enhanced trade liberalization and the resulting general improvement to the economic
welfare of countries, is an effective route to improving environmental protection.
- 6 -
Consideration of impacts on market access and terms of trade for developing countries is an
essential part of assessing policies intended to promote more sustainable consumption and
production. The imposition of trade restrictions, whether explicit or implicit, presents
counter-productive hurdles to developing countries.
? Industrial development enables business-to-business and cross-sectoral cooperation for
SMEs. The internationalization of industry through supply chain relations, joint ventures and
FDI as well as through locally grown businesses offers new opportunities for SMEs in
developing countries to participate in cross-border production networks and partnerships. In
many cases, voluntary partnerships make good business sense, and business supports
partnerships as constituting one of the most practical means of delivering sustainable
development outcomes. Business and others should work to create long-term partnerships
with SMEs for sustainable development, engaging respectfully and openly with communities
around the world.
? The use of environmental management systems and other management tools is well under
way in many companies. Waste minimization, pollution prevention and cleaner industrial
production are key elements of continuous improvement and increased eco-efficiency in
industrial operations. The supply-chain and value-chain linkages inherent in industrial
development present many opportunities to promote technological cooperation and capacity
building in environmental management systems and other good practices.
CHANGING UNSUSTAINABLE PATTERNS OF CONSUMPTION AND PRODUCTION
? A sustainable world is one with less poverty, less disease, less hunger, and greater access
to education, safe water and sanitation, energy and a healthy environment. It is one that
depends not just on well managed eco-systems, sound economic rules and international
cooperation, but also on effective national governance based on democratic process and
human rights protection. Sustainable development seeks to inspire improvement and
innovation, and answer the aspirations of the world?s citizens. Business is an integral part of
that sustainable world.
To move consumption and production patterns in more sustainable directions, the
international community should encourage policies that:
o Stimulate innovation through competition in the market place,
o Provide consumers with information and choice,
o Enable market access for developing countries.
? There is no inherent contradiction and many synergies between economic growth, trade
liberalization, environmental protection and sustainable development. Economic growth and
trade liberalization provide the conditions in which protection of the environment can best be
achieved, and environmental protection, in balance with other human goals, is necessary to
achieve growth that is sustainable. UNCSD has a key role in the context of UN efforts to
support enabling conditions (democracy, protection of human rights, rule of law, free
markets, protection of intellectual property, uniformly enforced regulations, infrastructure,
education) that allow business to make its most effective contribution to sustainable
development, creating wealth, jobs and technological innovation.
? There are many definitions of globalization that evoke a wide range of reactions. At base,
globalization simply means that we are becoming every day more aware of the growing
interconnectedness of people, ideas, countries and societies as well as between people and
- 6 -
their natural environment. The question is how we can harness the power of such
interconnections to achieve progress on environmental questions within the framework of
sustainable development.
? There is a strong business case to undertake activities that preserve and restore ecosystem
services, thus making business and industry key partners in addressing the challenges
highlighted by the Millennium Ecosystem Assessment and other similar reports. Business
and industry has compelling reasons to be concerned about continued ecosystem
degradation because it can directly impact their core activities through scarcity of raw
materials, higher operating costs, government restrictions and reduced flexibility, among
others.
? Globalization should not be considered from a "top-down" standpoint alone. Implementation,
institutions, enabling conditions, capacity, resources and governance at the local level are
equally important to the effective achievement of environmental policy objectives. Clearly,
improved implementation, capacity building and additional resources are required from the
"bottom up" to respond to environmental and sustainability challenges in the context of
globalization, and much of this is contributed by business and industry at the ?grass roots?
level of industrial development.
CLOSING THOUGHTS: WAYS FORWARD
Business views, expertise and engagement are essential in these discussions because of the
business community?s central economic, social and environmental roles in industrial
development. CSD15 should recognize and support the enormous and extremely diverse
contribution that business will continue to make to the development of new sustainable models
for meeting global sustainable development challenges.
The international business community is deeply committed to supporting implementation of
sustainable development: in our view, this encompasses carrying out actions from Agenda 21,
the Johannesburg Plan of Implementation, decisions of the Commission on Sustainable
Development, the United Nations Millennium Declaration and the Monterrey Consensus of the
International Conference on Financing for Development.
Implementation of these commitments by all sectors of society is essential, and although they
are ambitious, making significant progress is attainable with the right priorities, adequate
resources and framework conditions. Business is a key partner in these undertakings and has
made progress in implementing environmental and sustainability policies and practices, and
providing more efficient and sustainable processes, products and services.
In many industrial development-related settings, voluntary initiatives and partnerships make
good business sense. Business and industry supports partnerships as one of the most practical
means of delivering sustainable development outcomes. Business engages in partnerships
where there is a sound business case and potential to deliver benefits for all partners. Such
partnerships are more likely to be sustainable and achieve tangible results.
The true measure of the business contribution to partnerships is the results achieved on the
ground. The immense value of local partnerships and their contribution to achieving sustainable
development in communities around the world should be recognised. All business operations
are ultimately ?local? - with local markets and customers, employees and managers,
communities and neighbours.
INDUSTRIAL DEVELOPMENT TALKING POINTS
for the IPM (26 Feb ? 2 Mar 2007)
27 FEBRUARY 2007
While industrial development is just one distinct aspect of commercial activity, many sectors
beyond manufacturing (such as agriculture, retail, services, energy, natural resources and
others) depend on it, making it central to commercial activity and sustainable development. As
such, industrial development is a critical contributor in the prosperity and progress of societies in
developing and developed countries.
Through industrial development, business is:
? Creating jobs and contributing to capacity-building
? Building and maintaining infrastructure (important for energy and water, among others)
? Growing new opportunities for economic growth at local and regional levels
? Promulgating accountable and transparent environmental and other management
systems, cleaner production and eco-efficiency
? Generating resources needed to finance social needs, for example, tax revenues to
public authorities
? Providing goods and services at competitive prices
? Sharing good practices and contributing to capacity building
? Engendering technological innovation and cooperation.
The capacity and willingness of the private sector to advance sustainable development is
immense. Yet ultimately, success will depend on the will of local and national
governments to implement the appropriate policy and governance frameworks.
Partnerships and voluntary initiatives should also be pursued by business, governments
and other stakeholder groups in an effort to create maximum value and complement
regulation. Building a sustainable future will require tapping and enabling the
capabilities and resources of all to invent, manage, empower and cooperate.
The challenge ahead in the area of industrial development is what can be done to support and
promote the growth of sustainable businesses, particularly in developing countries.
Industrial development makes its greatest contribution to sustainable development in the
context of sound enforced regulation and good governance that relies to the extent possible on
sound science, risk management, the market and voluntary approaches that supplement legal
requirements. Creating an enabling environment within which enterprises of all sizes and
sectors can develop, create jobs, and pursue technological innovation and cooperation, coupled
with sound governance and policies to reduce barriers to international trade and FDI, traces a
significant route out of poverty.
PROMOTING AN ENABLING ENVIRONMENT AT THE INTERNATIONAL AND NATIONAL
LEVELS FOR INDUSTRIAL DEVELOPMENT
A successful and sustainable industrial base strengthens society. Many parts of the business
community are engaged in the process of industrial development, and many more depend upon
it. As such, industrial development is clearly an essential component of the activities of society
as a whole. Industrial development?s substantial contribution to economic growth helps create a
large part of the resources needed to finance public sector environmental protection and social
- 6 -
development programmes, for example, through providing tax revenues to public authorities,
and setting and enforcing scientific and risk-based regulations. Industrial development also
contributes to the social and economic aspects of sustainable development through direct job
creation and indirect employment effects via supply chain interactions with other sectors of the
economy.
Three key areas of required domestic legal and regulatory frameworks to grow sustainable
businesses are set out in a recent report of the Secretary-General on Strengthening the Role of
the Private Sector and Entrepreneurship in Financing for Development, as having a strong
impact on the business environment:
? Opening and closing a business?bureaucratic requirements to start up a business are
excessive and time-consuming in many countries and laws and regulations often restrict the
ability of enterprises to restructure or shut down.
? Property rights?in many developing countries a large part of land property is not formally
registered, limiting access to credit and improved land values, especially for small
enterprises and the informal sector; reducing the size of the informal sector should be a
prime objective of public policy.
? Effective enforcement of contracts and protection of creditor rights, which needs a well
functioning court system backed by effective enforcement.
Conducive enabling frameworks are critical both for local business communities and for foreign
investment. Further, cooperation between business and governments, with understanding of
their respective roles and responsibilities, is crucial. Industrial development will be slowed by
the lack or poor condition of infrastructure in areas such as water, energy, telecommunications
and road systems. Infrastructure development is a priority concrete area where public and
private sectors can work together through public private sector partnerships. For such
partnerships (PPPs) to succeed:
�� The legal framework needs to enable the entrance and operation of private entities in what
are often state-controlled industries;
�� The coordination of preparatory measures for efficient PPP start-up and implementation is
necessary;
�� The allocation of risks through contractual agreements needs to be addressed. While
considering measures to facilitate PPPs, it is important to note that project profitability is a
vital prerequisite for private sector involvement, especially if the project requires long-term
engagement.
STRENGTHENING CAPACITY-BUILDING SUPPORT TO DEVELOPING COUNTRIES TO
DIVERSIFY EXPORTS, WITH PARTICULAR ATTENTION TO SMEs
? Policies that hamper market access for products that are deemed not to satisfy arbitrary
criteria for their production and components have a particularly negative impact on
developing countries. These policies in the name of SCP penalize developing countries for
their stage of development and different sustainability priorities.
? The business community?s role in capacity building, technological cooperation and foreign
direct investment (FDI) is critical in helping developing countries progress social and
economic development, and improve environmental practices.
? Enhanced trade liberalization and the resulting general improvement to the economic
welfare of countries, is an effective route to improving environmental protection.
- 6 -
Consideration of impacts on market access and terms of trade for developing countries is an
essential part of assessing policies intended to promote more sustainable consumption and
production. The imposition of trade restrictions, whether explicit or implicit, presents
counter-productive hurdles to developing countries.
? Industrial development enables business-to-business and cross-sectoral cooperation for
SMEs. The internationalization of industry through supply chain relations, joint ventures and
FDI as well as through locally grown businesses offers new opportunities for SMEs in
developing countries to participate in cross-border production networks and partnerships. In
many cases, voluntary partnerships make good business sense, and business supports
partnerships as constituting one of the most practical means of delivering sustainable
development outcomes. Business and others should work to create long-term partnerships
with SMEs for sustainable development, engaging respectfully and openly with communities
around the world.
? The use of environmental management systems and other management tools is well under
way in many companies. Waste minimization, pollution prevention and cleaner industrial
production are key elements of continuous improvement and increased eco-efficiency in
industrial operations. The supply-chain and value-chain linkages inherent in industrial
development present many opportunities to promote technological cooperation and capacity
building in environmental management systems and other good practices.
CHANGING UNSUSTAINABLE PATTERNS OF CONSUMPTION AND PRODUCTION
? A sustainable world is one with less poverty, less disease, less hunger, and greater access
to education, safe water and sanitation, energy and a healthy environment. It is one that
depends not just on well managed eco-systems, sound economic rules and international
cooperation, but also on effective national governance based on democratic process and
human rights protection. Sustainable development seeks to inspire improvement and
innovation, and answer the aspirations of the world?s citizens. Business is an integral part of
that sustainable world.
To move consumption and production patterns in more sustainable directions, the
international community should encourage policies that:
o Stimulate innovation through competition in the market place,
o Provide consumers with information and choice,
o Enable market access for developing countries.
? There is no inherent contradiction and many synergies between economic growth, trade
liberalization, environmental protection and sustainable development. Economic growth and
trade liberalization provide the conditions in which protection of the environment can best be
achieved, and environmental protection, in balance with other human goals, is necessary to
achieve growth that is sustainable. UNCSD has a key role in the context of UN efforts to
support enabling conditions (democracy, protection of human rights, rule of law, free
markets, protection of intellectual property, uniformly enforced regulations, infrastructure,
education) that allow business to make its most effective contribution to sustainable
development, creating wealth, jobs and technological innovation.
? There are many definitions of globalization that evoke a wide range of reactions. At base,
globalization simply means that we are becoming every day more aware of the growing
interconnectedness of people, ideas, countries and societies as well as between people and
- 6 -
their natural environment. The question is how we can harness the power of such
interconnections to achieve progress on environmental questions within the framework of
sustainable development.
? There is a strong business case to undertake activities that preserve and restore ecosystem
services, thus making business and industry key partners in addressing the challenges
highlighted by the Millennium Ecosystem Assessment and other similar reports. Business
and industry has compelling reasons to be concerned about continued ecosystem
degradation because it can directly impact their core activities through scarcity of raw
materials, higher operating costs, government restrictions and reduced flexibility, among
others.
? Globalization should not be considered from a "top-down" standpoint alone. Implementation,
institutions, enabling conditions, capacity, resources and governance at the local level are
equally important to the effective achievement of environmental policy objectives. Clearly,
improved implementation, capacity building and additional resources are required from the
"bottom up" to respond to environmental and sustainability challenges in the context of
globalization, and much of this is contributed by business and industry at the ?grass roots?
level of industrial development.
CLOSING THOUGHTS: WAYS FORWARD
Business views, expertise and engagement are essential in these discussions because of the
business community?s central economic, social and environmental roles in industrial
development. CSD15 should recognize and support the enormous and extremely diverse
contribution that business will continue to make to the development of new sustainable models
for meeting global sustainable development challenges.
The international business community is deeply committed to supporting implementation of
sustainable development: in our view, this encompasses carrying out actions from Agenda 21,
the Johannesburg Plan of Implementation, decisions of the Commission on Sustainable
Development, the United Nations Millennium Declaration and the Monterrey Consensus of the
International Conference on Financing for Development.
Implementation of these commitments by all sectors of society is essential, and although they
are ambitious, making significant progress is attainable with the right priorities, adequate
resources and framework conditions. Business is a key partner in these undertakings and has
made progress in implementing environmental and sustainability policies and practices, and
providing more efficient and sustainable processes, products and services.
In many industrial development-related settings, voluntary initiatives and partnerships make
good business sense. Business and industry supports partnerships as one of the most practical
means of delivering sustainable development outcomes. Business engages in partnerships
where there is a sound business case and potential to deliver benefits for all partners. Such
partnerships are more likely to be sustainable and achieve tangible results.
The true measure of the business contribution to partnerships is the results achieved on the
ground. The immense value of local partnerships and their contribution to achieving sustainable
development in communities around the world should be recognised. All business operations
are ultimately ?local? - with local markets and customers, employees and managers,
communities and neighbours.